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MPS Board OKs health care changes that maintain commitment to retirees, save up to $6 million per year

Published: September 18, 2014

Board also approves plans to encourage generic drug use and offer a lower-cost health plan option

MILWAUKEE — The Milwaukee Board of School Directors approved a plan Thursday night that maintains Milwaukee Public Schools’ health care commitment to retirees while saving the district up to $6 million a year.

The Board voted to convert current retiree health plans for eligible retirees 65 and older to a Group Medicare Advantage PPO Plan. The vast majority of retirees eligible for the plan will see no changes to benefits and many will be offered some enhanced services.

“This action lets the district maintain virtually the same level of healthcare benefits for retirees while moving us to a more sustainable plan for future retirees,” explained Milwaukee Board of School Directors President Dr. Michael Bonds. “We are pleased to be able to offer a plan that allows us to save money and keep our promise to our retirees.”

MPS will save an estimated $6 million through a seamless coordination of healthcare benefits through the Medicare Part C – or Medicare Advantage – program.

“Medicare Advantage is a simpler plan that offers wellness health programs. The seamless coordination of benefits will also mean more predictability for copayment costs,” said Dr. Karen Jackson, MPS’ Chief Human Capital Officer. “Most retirees will also see a reduction in their premium costs, which may result in up to $8 million in annual savings to MPS’ approximately 5,000 Medicare-eligible retirees.”

MPS is opting to use the Group Medicare Advantage PPO program because it provides a way to best meet the healthcare needs of retirees while being fiscally responsible. Medicare Advantage plans have become an increasingly popular option for Medicare beneficiaries. Since 2010, enrollment has increased by 4.6 million, or 41 percent. Today, approximately 16 million people are enrolled in a Medicare Advantage plan. That’s almost 1 in 3 Medicare beneficiaries. Medicare Advantage plans’ strong track record allowed the district – in collaboration with its union partners – to confidently switch to this option for MPS.

Eligible retirees will begin to receive information in October with information meetings scheduled in November. The new plan goes into effect for retirees on January 1, 2015.

The Board also approved a prescription drug plan change for employees and retirees that encourages generic drug usage when available as a cost-saving measure. Those seeking brand-name medications when a generic equivalent is available would be responsible for paying the difference in cost.

In addition, MPS will now offer a high-deductible health plan option for employees, offering lower premiums in exchange for higher deductibles. This additional plan provides employees with lower premium health plan option and the opportunity to open a Health Savings Account, an employee-owned, tax-advantaged savings account that can fund current and future medical expenses.

About Milwaukee Public Schools

Milwaukee Public Schools is committed to accelerating student achievement, building positive relationships between youth and adults and cultivating leadership at all levels. The district’s commitment to improvement continues to show results:

More MPS students are meeting reading standards

The MPS Class of 2014 earned $31 million in scholarships, up $7 million; and

MPS is home to 4 of the state’s top 15 high schools according to U.S. News and World Report